book: Adopting Inflation Targeting: Practical Issues for Emerging Market Countries (Occasional Paper...

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	• Adopting Inflation Targeting: Practical Issues for Emerging Market Countries (Occasional Paper (International ... Andrea Schaechter, Mark R. Stone, ... International Monetary Fund, 2000 - 62 pages view larger image
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This Occasional Paper examines the institutional and operational praticalities of inflation targeting for emerging market countries. The paper concludes that the foundations for successful, full-fledged inflation targeting are built on a strong fiscal position and entrenched macroeconomic stability; a well-developed financial system; central bank instrument indepenence and a madate to achieve price stability; a reasonably well understood transmission mechanism between monetary policy actions and inflation; a sound methodology for constructing inflation forecasts; and transparent monetary policy. The authors point out that these elements need not be fully in place before a country begins the transition to inflation targeting.

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